For e-tailers who still think that Web video may be a fad, consider this stat: In March 2008, U.S. Internet users watched 11.5 billion online videos. That’s a 13 percent gain from the prior month and a 64 percent gain from the identical month the prior year, according to Comscore.

In March, Google Sites once again ranked as the top U.S. video property with more than 4.3 billion videos viewed (38 percent share of all videos), gaining 2.6 share points versus the previous month. YouTube.com accounted for 98 percent of all videos viewed at Google Sites. Fox Interactive Media ranked second with 477 million videos (4.2 percent), followed by Yahoo Sites with 328 million (2.9 percent) and Viacom Digital with 249 million (2.2 percent).

Thanks in no small part to soaring traffic on YouTube, Google for the first time took the top slot in American consumer reach in April 2008, besting Yahoo.

But it took that top slot just barely, reaching 141 million Americans in April. Yahoo ranked second with 140.6 million visitors, followed by Microsoft Sites with 121.2 million visitors.

When TJX announced a MasterCard agreement last month to pay $24 million for data breach costs stemming from the industry’s worst payment card data breach, it was contingent on at least 90 percent of the banks agreeing.

No surprise, but TJX made that acceptance rate with room to spare, coming in at 99.5 percent, the retailer announced May 14.

Retailers focused on contactless payment might want to circle July 24, 2008, on their calendar. That is when the U.S. Federal Trade Commission will hold a hearing in Seattle “to explore the growth of contactless payment systems and the implications for consumer protection policy.”

Here are the details of the FTC’s hearing along with a link to submit comments electronically. There are lots of legitimate pros and cons on this issue, but the panel should at least understand the merchant’s perspective.

Guess this is what the cliché-afflicted would call a “sign of the times.” Macys is killing the Bloomingdale’s catalog while Amazon.com is selling copies of Bloomingdale’s 1886 catalog for $12. (Can you imagine the number of out-of-stocks in that thing?)

Current Bloomie’s owner Macys is killing the classic catalog “by early 2009″ to focus more on its Web site and “reduce redundancies” (corporatespeak for pinkslip panic). A Macys statement even came up with a politically correct reason to zap the catalog: “Eliminating the paper catalog is also consistent with our sustainability and environmental policies of communicating more with customers electronically and less in paper.”

Trying to collect some innocuous-sounding information from self-checkout customers, a self-checkout system at a Maryland Home Depot instead accidentally got itself embroiled in a privacy controversy.

The story began on May 8 when a woman visited a Baltimore Home Depot to buy a few odds and ends, including plants, pots and tile sealer. Read more.

With its sites being unavailable for barely one hour over four months, MySpace has the best uptime of any major social networking site and Twitter (more than 37 hours of downtime during the same period) has the worst. Those stats come courtesy of Pingdom’s periodic uptime surveys, which tracked some 16 social networking sites from January 1 through April 30 of this year.

Not only was Twitter’s 37 hours and 16 minutes of downtime the worst in the group, it was almost double the amount of downtime from the second worst-performing site (Reunion.com, with 18 hours and 55 minutes of downtime). But even Twitter’s numbers amounted to an uptime that sounded good: 98.72 percent. Pingdom’s Peter Alguacil said those percentages can be misleading. Read more.

London-based Marks & Spencer is the RFID tag champ. Attaching 350 million a year to items of clothing, they even blow past Wal-Mart when it comes to tagging individual items. Unfortunately, each and every one of those tags might have used the wrong technology.

The exec “who has been running the program said to me a year ago, ‘I’d love Nokia to say we have a way for people to walk into this door, wave their phone over a suit and take it home,’” said IDTechEx Chairman Peter Harrop. “But he said, ‘I think I’ve chosen the wrong frequency.’” Read more.

Microsoft on Saturday (May 3) gave up its efforts to acquire Yahoo, declaring such an effort too expensive.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer,” Microsoft CEO Steve Ballmer said in a letter to Yahoo CEO Jerry Yang. “After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.” Read more.

Rite Aid on May 1 announced an extensive set of E-Commerce and POS changes to accommodate visually-impaired consumers, admittedly under an implied litigation threat from advocacy groups.

The $24 billion 5,000-store pharmacy chain joins an expanding list of national retailers who have agreed to make such changes, including 7-Eleven, RadioShack, Safeway, Trader Joe’s and Wal-Mart. The most prominent retailer who has fought such efforts is Target, whose legal battle continues. Read more.

As retailers continue to experiment with mobile commerce, one potential problem is when mobile customers prove to be truly mobile. Let’s say a national chain sends an E-mail blast to the cellphones of 10,000 Boston-area customers, inviting them to visit the store for a free sample on Wednesday. The chain limits the offer to the Boston area through area code and other data.

But it just so happens that there’s a huge convention in San Jose that day of the Society Of People Who Live In Boston. Your San Jose locations get flooded with people asking for their free gift, leading to a lot of baffled employees and angry customers. This observation comes courtesy of a colleague who has far too much time on his hands to think up such things.

Like it or not (place this father defiantly in the “not” category), children are using the Internet’s social network sites at a younger age, with retail marketers hovering close by. How young?

New stats show 17 percent of boys aged 10-12 used such sites last year, which is more than double the 8 percent who used social sites in 2006, according to the Harris Poll. For 10-12-year-old girls, the figure is 27 percent, more than 2-and-a-half times the prior year’s 11 percent. In the 13-15-year category, boys jump to 46 percent and girls jump to 54 percent. Oddly enough, that 54 percent for 13-to-15-year-old girls actually dropped three percent from 2006.

Microsoft is “leaning toward going hostile in its pursuit of Yahoo,” with an announcement “likely” on May 2, according to a report in that day’s edition of The Wall Street Journal.

Although such a move would not likely have a direct impact on the IT side of E-Commerce with major retailers, it could sharply impact tens of thousands of smaller merchants that rely on Yahoo to sell their wares.

Google says it has concocted a better way of searching for Web images, one that involves image-recognition to “see” what the image depicts as opposed to just reading the accompanying text.

This technique, called Visual Rank, has tremendous potential to shake up E-Commerce, which heavily relies on product images. The details were discussed by Google last week at the International World Wide Web Conference in Beijing, where two Google scientists described Visual Rank as “an algorithm for blending image-recognition software methods with techniques for weighting and ranking images that look most similar,” according to this New York Times story.

Pizza Hut is taking the “other people who bought also liked” approach mastered by Amazon.com and is trying to apply it to pizza and breadsticks and their Web site.

The new feature—dubbed Virtual Waiter and introduced by the fast-food chain on April 24—is based on “technology that gathers data from millions of online orders and suggests menu items that best match customers’ orders.” But a demo showed that the technology was much more sophisticated than that suggested. Read more.

EBay’s PayPal is following the path set by other alternative payment players and is starting to appear in physical stores.

It’s not a huge chain, but it’s a start. Moosejaw Mountaineering and its seven stores will now accept PayPal and the chain is also starting to use in-store kiosks to display online customer reviews, according to this Internet Retailer story. Neither move is a first. BillMeLater is already inching into online payments, and the Fair Indigo chain in Wisconsin already started the kiosk-search-through-Web-customer-reviews effort last year. Still, any movement toward Merged Channel is welcome.

We’ve been seeing a bizarre trend this national recession. It seems to be hitting hard the companies that expected to be hit, the ones that cut back spending in anticipation of the downturn. Lo and behold, after cutting back on customer service and marketing programs, they see revenues fall. Did they correctly predict the sales drop or did they unintentionally cause the sales drop?

This question comes to mind when looking at some recent earnings reports. Wal-Mart’s been faring well, but it points to increased grocery and other low-cost items, suggesting that they may be taking sales away from higher priced grocery rivals. That might be a recession sign. But this week’s Amazon figures raise questions about such analysis. Read more.

Starbucks on April 23 cut back its financial projections for the year, citing continuing declines in its store traffic, especially in California and Florida. This is announced just a few weeks after Starbucks said it would shake up its Web presence.

But as we’ve noted before, Starbucks has always had an unusually weak Web presence, especially for a chain that for years dominated social networking buzz among younger consumers long before MySpace, Facebook or YouTube were factors. Is this the price that must be paid for years of Web neglect? Could an enthusiastic Web site have helped in-store sales?

The E-Commerce folk over at the National Retail Federation–Shop.org–are not so quietly putting out feelers for a new VP gig to pull in other e-tailers.

The position details are what would be expected–overseeing research, coordinating with government lobbyists, developing best practices, etc.–but if there are any readers who want to try and shape how E-Commerce players are treated, it might be interesting. Scott Silverman, Shop.org’s executive director, is begging for interested folk to drop him a line at hr-shop@nrf.com.

If there’s one thing that the last year of credit card catastrophes has made undeniable it’s that mixing credit cards, retailers, banks and card brands is unpredictable and a lot more complex than anyone wants to believe. Whether it was last year’s TJX revelations about how bad security can get (TJX to the SEC: The bad guys were able to get a copy of our encryption key, but not to worry. They grabbed the data before we had a chance to encrypt it, so the joke’s on them) or this year’s Hannaford details, where a PCI-compliant retailer lost data in transit while it was flowing through a secure private pipe, almost every assumption today is being challenged.

With that in mind, StorefrontBacktalk has been asking retailers, lawyers and other experts (and gadflies) for their favorite credit card security issue brain teasers. How many can you figure out? (No, there are no right answers, other than accepting cash.) Read more.

When North Face—a unit of the $7.2 billion VF Corp. and a major manufacturer of athletic gear and clothing—officials started looking at the tidal wave of consumer-generated Web videos being created, they saw consumer passion. It’s the same kind of passion that exists in sports enthusiasts, which is who the retailer needs to reach.

Those North Face executives are far from alone. As retailers and consumer goods manufacturers have been watching—mesmerized—consumers watch more than 10 billion U.S. Web videos in February, they have tried to figure out ways to make it work for them. Read more.

E-Commerce customers have several complaints about online buying, but the top concerns are Web images that don’t match the real thing and sites that make it difficult to easily ask any questions, according to a late March Opinion Research Corp. Web survey of 1,092 consumers.

Linda Shea, the polling firm’s senior vice president and global managing director of customer strategies, said the inability to answer questions was particularly telling, and it was the result of an E-Commerce double-whammy. It reflects a rapidly increasing set of consumer expectations when it comes to E-Commerce sites at the exact same time that retailers are slashing customer service budgets, she said. Read more.

The National Retail Federation’s Shop.org is lobbying the U.S. Federal Trade Commission to not flag consumers when their shopping behaviors are being tracked online, arguing that it would merely serve to frustrate those consumers.

In considering voluntary guidelines for E-Commerce behavioral advertising, the FTC is considering asking sites to display a “pop-up” notification whenever information is collected. Wrote Shop.org: “We all know how frustrating pop-ups can be when you are simply trying to read the latest headlines on a newspaper website. Now transfer that experience to a retail website where customers have come to expect a seamless experience from homepage to checkout. These types of ‘hiccups’ could be devastating.”

In case there are two or three of you who are still skeptical about whether Web video will have an impact, consider these new figures. In February, U.S. Internet users viewed more than 10 billion online videos, which represents a 3 percent gain versus January (despite February being two days shorter) and a 66 percent gain versus February 2007, according to ComScore.

Google/YouTube was overwhelmingly the top source (at 35.4 percent), following by Fox (5.8 percent), Yahoo (2.9 percent), Microsoft (also 2.9 percent), Viacom (2.2 percent), Time Warner non-AOL (1.3 percent), Disney (1.3 percent), AOL (1.1 percent), ABC (1.0 percent) and Comcast (0.9 percent).

One more stat: Nearly 135 million U.S. Internet users spent an average of 204 minutes per person viewing online video in February.

A DVD rental kiosk outfit has rolled out a kiosk that keeps track of orders and awards free videos for frequent shoppers. The idea of a kiosk that has a long-term memory and an active CRM component is a wonderful next step (OK, a baby step) for intelligent kiosks.

The new units from DVDPlay use E-mail addresses in lieu of a loyalty card. “By entering an E-mail address during the rental process, the stand-alone DVD rental machine’s patent-pending software recognizes the number of customer rental transactions and, after every tenth rental, generates a promotional code for a free movie that is automatically sent to the customer’s E-mail account,” said a statement issued by the company.

Wal-Mart is pushing to create online communities for its customers, where Wal-Mart employees can sit on the sidelines, take notes and be influenced, or so suggests the chief marketing officer for online operations at the world’s largest retailer.

“Consider 130 million customers in a community sharing information on products they buy and use,” said Cathy Halligan, in this Marketing Daily story. “We learned you need to listen to these customers and implement the top-requested features.”

As of June 17, anyone in Australia buying from eBay online will be told: “PayPal” or “Forget It, Pal.”

With the exception of in-person pickups and cash-on-delivery, plus a handful of large-ticket items (specifically cars, motorcycles, aircraft, boats, caravans, trailers, commercial trucks, services, real estate and businesses) for sale, sellers will be required to offer eBay-owned PayPal as a payment method by May 21, in anticipation of the June 17 ban on anything else. Said eBay: “If we think these changes will significantly improve the buyer experience, we may expand them to additional segments of sellers or categories.” Read more.

A group of 109 McDonald’s restaurants in the Salt Lake City region are doing a mobile commerce trial, with participating consumers getting free iced coffee. Although those 109 stores are barely one coffee bean’s worth, given the $22.8 billion chain’s 31,377-store network, the trial is interesting both for its capabilities and for how much data-control McDonald’s was willing to give up.

McDonald’s is launching iced coffee as part of some new menu options and “part of our objective was to create additional awareness,” especially among the younger consumers who McDonald’s assumes will be receptive to a mobile coupon campaign.” Read more.

E-Commerce is growing sharply—much more rapidly than in-store sales. It grew some 21 percent, to $175 billion last year, crediting E-Commerce with six percent of all retail sales, according to new figures from Forrester Research. It was part of their annual State of Retailing Online Report that they do with NRF’s Shop.org.

That E-Commerce figure will hit $204 billion this year (when it’s percent of total retail will climb to seven percent) and will continue to have major gains for the next several years, hitting $335 billion in annual sales by 2012, Forrester said. But one of the report’s authors, Forrester Research Director Carrie Johnson, said that this isn’t necessarily cause for retail celebration, as she projected that many of those increased sales are little more than online cannibalizing in-store sales. Read more.

The Web world defies prediction—or does it? Conventional wisdom would have the new up-and-coming retailers faring better online, while the old-style bigbox merchants lag behind. And yet, Starbucks has had far more online troubles than it should have while Sears, according to this intriguing Chicago Tribune feature, is soaring online.

The number of people who visited Sears.com and Kmart .com at least once in February—an industry metric known as unique visitors—rose 20 percent, to 14.7 million, from the same period last year. That makes Sears’ Web business the second-fastest-growing site among mass merchants in 2007. Sears clearly has some serious challenges, but go tell that to the company’s Web people.

When Best Buy removed annual fees from its bonus card, the company yielded about 10 times the number of shoppers opting to sign up for its rewards program, according to this Forbes.com story.

A location that gains a reputation as a “flat-screen store,” for example, is identified as one frequented by more people with disposable incomes. Hence, salespeople are trained to pitch complimentary products, like sound systems and attachments. Interesting story….

The European Commission is cracking down on search engine data-retention, with a new proposed rule that search engines should delete personal data about their customers within six months.

The BBC News site said this recommendation is likely to be accepted by the European Commission and could lead to a clash with search giants like Google, Yahoo and MSN. “Google and MSN anonymise user data after 18 months, while Yahoo does the same after 13 months,” the BBC reported.

ISPs have been quietly expanding their use of deep-packet inspection. They are capturing everything a user does–to the point where “at least 100,000 U.S. customers are tracked this way, and service providers have been testing it with as many as 10 percent of U.S. customers, according to tech companies involved in the data collection,” said a new report in The Washington Post.

The service providers exploring and testing such services have largely kept quiet–”for fear of customer revolt,” according to one executive involved who was quoted in the Post story. Each company allows users to opt out of the monitoring, though that permission is buried in customer service documents.

Microsoft’s board has given Yahoo’s board three weeks to either agree to a takeover deal or Microsoft threatens it will go hostile.

In a Saturday letter from Microsoft CEO Steve Ballmer to the Yahoo board, Ballmer strongly hinted that if the deal goes hostile, the original $44.6 billion offer would be reduced. “During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined,” the letter said. Yahoo responded Monday, countering that Microsoft’s stock drop could make their offer less valuable. Read more.

With the background of repeated recent payment data breaches coupled with wireless security concerns, the U.S. Patent and Trademark Office last issued a trademark for a cellphone payment that leverages current retail equipment, an instantly encrypted validation code and completely sidesteps wireless communications. Plus, it avoids the retailer having to store the credit card number at all.

The Patent itself covers a variety of uses (see the Patent’s full text here as well as some illustrations that accompanied the federal filing), but its core functionality would require consumers to download a small applet to their phone, which would then be associated with a payment method plus a password and potentially some other authentication approach such as any form of biometrics. Password-only protection is the default scenario. Another piece of software would be installed in the retailer’s POS system. Read more.

Amazon.com on Wednesday rolled out a new service called TextBuyIt, which allows consumers to comparison shop online working solely with fast text messages. But the move may not sit well with other retailers, who could see this making it easier to find better deals elsewhere, especially in bookstores.

The service can also support Web searches—but that’s hardly new—and is being positioned by Amazon as an easier way for consumers to make Amazon purchases. The transactions can be almost solely done via text, with an old-fashioned phonecall used to verify the purchase. Read more.

Although the coupon redemption rate has been steadily declining for at least 10 years, a new vendor survey suggests the recession may turn that around.

Of the 1,529 U.S. consumers who responded, 67 percent said they are much more likely, or somewhat more likely, to use coupons during a recession, according to the survey performed by ICOM Information & Communications. Technology is helping, though, with CRM doing better job targeting households and Web coupons finding new fans among the paper-repulsed young.

Bankrupt Pay By Touch—officially using the name Solidus Networks—has sold off two key units for a total of $4.8 million.

Phoenix Check Cashing dropped $4.2 million to pick up Pay By Touch’s check-cash¬ing division, known as BioPay Paycheck Secure, according to The Nilson Report. Acculink paid $600,000 for ATM Direct, a unit trying to introduce PIN-based debit card payments for E-Commerce sites, the publication reported.

Was talking with the other day with a subscriber, who happens to head up security efforts for a Fortune 50 retailer. Is it coincidental, he asked, that Visa, Mastercard and the others just about always end up on the other side of the security argument? Could it truly be that they have some kind of a long-term strategic incentive to keep security looking good, but not too good? I was skeptical.

The security exec then asked an annoyingly thought-provoking question: What do you think would happen if retailers were given perfect encryption? Answering his own question (because I certainly wasn’t able to do it), he painted a picture of retailers who would use their perfectly-protected data and would confidently let it ride atop the public Internet. At that point, paying for the private security tunnels of a Visa or MasterCard would no longer be essential. Read more.

The retail move to embrace 2-D barcodes that began with a Sears trial in December and strong interest from BestBuy, the Gap and Target is inching forward, with a 500-store trial starting Thursday in San Francisco.

The trial, involving CitySearch, Antenna Audio and Scanbuy, is a fairly basic mobile integration effort. “More than 500 restaurants, shops and businesses reviewed by Citysearch are placing printed bar codes in their windows, and people who have Scanbuy software loaded on their phones can simply take a picture of the code and their phone’s Internet browser will immediately take them to the restaurant’s corresponding Citysearch page,” said a statement from the group.

Social networking giant Facebook suffered a major privacy glitch this week, where strangers were able to download members’ supposedly private restricted photos.
The Associated Press broke the story this week. “The Associated Press verified the loophole Monday after receiving a tip from a Byron Ng, a Vancouver, Canada computer technician. Ng began looking for security weaknesses last week after Facebook unveiled more ways for 67 million members to restrict access to their personal profiles,” the story reported. “But the added protections weren’t enough to prevent Ng from pulling up the most recent pictures posted by Facebook members and their friends, even if the privacy settings were set to restrict the audience to a select few.”

Saks is seeing how far it can take Web multimedia, by trying to morph its online catalogue with live video and creating a live model runway show.

The test focuses on Saks’ three best-selling departments: Contemporary ready-to-wear, handbags, and shoes, according to this MediaPost story. “Since Saks knows that about 99 percent of its shoppers have broadband access, ‘it’s been great for us,’” said Denise Incandela, president of Saks Direct. “You can have movement, voice-over, music and information, with narrators talking about what’s important in each look.”

When Starbucks used its shareholders’ meeting on Wednesday to roll out several new initiatives, the new coffee makers and blends got much of the attention. But two of the new plans—a revised CRM program and a new Web site—illustrate nicely how well Starbucks understands customer service and how it still hasn’t figured out the Web.

The change to the Starbucks Card Rewards program shows not just an understanding of customer service, but a realization that the best way to make a CRM program successful is to focus on benefits—true benefits—for both the customer and the retailer. Instead of merely tracking purchases and offering small discounts (adjusting the price of a cup of flavored coffee down from ludicrously overpriced to merely absurdly overpriced. Buy one more croissant and tomorrow you can enjoy a cup of Joe that is only insultingly overpriced), Starbucks is getting creative about rewards. Read more.

Among the retailers that are referenced as most intelligently embracing merged channels–the true channel-agnostic merchant–is Borders, whether it’s with their new concept stores or their breakup with Amazon.com.

It’s therefore an especially troubling note that they are having financial difficulties, as detailed in this New York Times piece. It’s an age-old business belief that few chains truly buy into and adopt major strategic changes until it’s too late. I hope that Borders turns out to be the exception.

The European Union has given the greenlight to Google’s multi-billion dollar takeover of Doubleclick, saying that there will still be plenty of online ad competition.

The European go-ahead followed a similar decision by the U.S. Federal Trade Commission late last year. “Google is hoping to offer a fuller set of online-advertising offerings and capitalize on DoubleClick’s relationships with Web publishers and advertisers to sell ads on behalf of more sites, with Google taking a commission,” the Wall Street Journal reported.

About one month into a major near field communication (NFC) trial, officials at fast-food chain Jack In The Box discovered a problem they hadn’t anticipated: cashiers didn’t know how to ring up a sale when the customer presented their cellphone as payment.

“We need to do a little more training,” said Michael Verdesca, the chain’s VP for systems development. Read more.

In the ongoing E-Commerce battle to identify fraudsters as early as possible, one payment security firm is pushing a methodology for fingerprinting a cyber thief’s computer and to then be on the lookout for it.

The laptop label that the company, Cybersource, uses is not actually based on the computer’s unique identification, as such data can’t be easily learned by the clues they drop when surfing. Instead, it’s based on the intersection of several routine characteristics, which combined make it fairly likely it’s the same machine. Some of the individual details would include the browser version, the exact operating system ID and the time differential on the system’s clock (”clock drift”). Read more.

As Wal-Mart toys with various approaches to grow and continue to dominate retail, a Wal-Mart experiment in Michigan is fascinating in its difference. It has crafted a store focused on the local Middle Eastern community, complete with Muslim greeting cards, Lebanese pop CDs and kusa and batenjan among the produce offerings.

Technology is not a key factor in this store’s approach, according to this detailed Newsweek story, but the store truly catering to the local residents is impressive nonetheless. How’s this for not acting like Wal-Mart? “The insular company even agreed to be scrutinized by a community advisory board made up of local Arab-American leaders to ensure it isn’t harming the mom-and-pop shops. One example: Wal-Mart agreed to charge one dime more than local grocers for a six-pack of pita bread.”

Hello, blog readers! We’ve been approached by a company that wants to create a 3-D environment for StorefrontBacktalk, complete with avatars for all readers. Before we explored this more seriously, we wanted to ask our readers whether we should proceed. Therefore…

Wal-Mart has quietly launched its latest blog effort–called Check Out–and the site shows unusually strong un-Wal-Mart-like candor. This move is key in E-Commerce because retail blogs are becoming a powerful tool, lying somewhere inbetween a social network and video sites. The big threat of E-Commerce to established large retail chains is its potential to ignore the power of the brand and equalize all with good designs.

The reality is, though, that brands still matter very much. Those brands come with all of the good and the not-so-good reputations of that retailer. Will Wal-Mart The Usurper’s reputation be tamed with a friendly and candid blog face? Read more.

When the Sharper Image chain of 184 stores announced late in February that it was filing for Chapter 11 bankruptcy and that it would no longer honor its gift certificates, the community quickly rallied around its injured compatriot, like sharks coming to the aid of an injured swordfish.

First up was a gift card exchange site called Leverage. Leverage didn’t offer to make good on the Sharper Image gift cards, but it did offer to make whole any of its own customers who bought Sharper Image gift cards through Leverage’s site. That move will cost Leverage “a few thousand dollars,” said Leverage CEO Mark Edward Roberts. Read more.

There have quite a few arguments about the many difficult-to-track ways that social networking sites can impact E-Commerce. But a small musical DVD sales site has discovered the devestating potential a video site coupled with social networking can have.

The two-employee a-cappella.com was deluged with requests for an old DVD when a YouTube copy of the video–which had been lying dormant on YouTube for almost a year–suddenly started getting 400,000 daily views. Seems that a-cappella.com was the only merchant to have the video for sale. Read more.

With so many companies today relying on the Internet as the guts of their communication strategy–a reliance that is only getting more intense as VoIP deployments soar–another Internet vulnerability came to light this week, when a Pakistani telecom firm unintentionally blocked some two-thirds of the world’s access to YouTube.

This move comes on top of an incident earlier this month when an undersea cable was cut near Dubai, also wreaking havoc with global Internet traffic. Are more robust safeguards needed? Is these kinds of disruptions can be happen so easily by accidents, how vulnerable would they be to deliberate terrorist efforts? Read more.

The stops and starts of mobile commerce in the U.S. has been well reported, along with the fact that many parts of Europe and Asia are well ahead of us. But here is a fascinating CNN report out of Kenya that details mobile-commerce efforts among–so help me–goat traders.

No, we’re not talking about Wall Street sorts, as in oil traders. We’re talking people working the fields selling and buying goats, where all funds quickly get converted into virtual dollars. There are no bank accounts nor credit cards behind these transactions. It goes from cash to mobile.

When Borders unveiled its first “concept store” this month in Ann Arbor, Mich., it offered a handful of new digital features, all intended to set up the chain’s rollout of a merged channel Web site (expected to go live sometime before the end of April). But what was interesting were their choices and some of the rationale behind it.

For example, one of the digital services for their in-store kiosk was from an E-Commerce site called Shutterfly.com. That decision went beyond the attraction of digital photos, said Kevin Ertell, Borders’ E-commerce chief. Read more.

One of the most impressive improvements in E-Commerce in recent years involves chat. Whether it’s passive chat’s ability to communicate exactly where the shopper is and where they have been or active chat’s sense of when a customer is about to abandon a cart or is otherwise is need of help, the recent improvements have been powerful.

But it’s been difficult to quantify the ROI of such chat functions, mostly because it’s impossible to know reliably what the customer would have likely done had a chat session not happened. Forrester Research this week this to quantify the slippery ROI arguments for interactive chat and made an eloquent case for chat investment. Read more.

Amazon this week is undergoing two more strategic changes, one of its own doing and one being foisted upon it by a state government.

Amazon’s own change involves it selling access to its pages to direct rivals. The backstory involves the stunningly thin margins that an E-Commerce behemoth like Amazon enjoys and the realizatio